If you’ve done any holiday shopping this season, there’s a good chance you’ve done at least some of it online. According to a recent Visa survey, more than 47 percent of holiday shopping in 2016 will be completed online whether on your laptop, tablet or mobile device. As e-commerce continues its rapid growth among American consumers, Visa is continually looking for ways to make those digital transactions safer and more secure. One way we’re doing that is offering security technology, called tokenization, that we implement through Visa Token Service (VTS).
The Visa Token Service standard is a security technology that replaces cardholder information, such as account numbers and expiration dates, with a unique digital identifier (a “token”) that can be used for payment without exposing a cardholder’s more sensitive account information. Tokenization hides consumers’ confidential account information during digital transactions, making digital payments more secure for everyone, everywhere.
Today, we are pleased to announce we recently signed an agreement with Mastercard that will accelerate the adoption of payment tokens in Visa Checkout and Masterpass. The reciprocal tokenization agreement allows Visa to request tokenized Mastercard payment credentials from Mastercard for provisioning into Visa Checkout, and Mastercard to request tokenized Visa credentials from Visa for provisioning into Masterpass. By allowing each network to request tokenized payment credentials from the other network, this agreement will ensure that each network’s wallet solutions can continue to stay open to other card brands while also adding the extra security of using tokens in place of real card numbers.
With each network now able to request tokenized payment credentials from the other network, this agreement will benefit our merchants, our issuers and consumers—many of whom have multi-brand relationships. This agreement will expand tokenization availability to merchants and issuers, helping further encourage the use of tokens for Visa Checkout instead of personally-identifiable account numbers, and ultimately extending the proliferation of secure, digital payments.
With many financial institutions issuing products on both networks, we have been working to deliver products that simplify our issuers’, our merchants’ and our consumers’ experience. Visa Checkout is a great example of one of these experiences—becoming an industry leader in e-commerce, with more than 1,400 financial institutions, 17 million consumers and more than 300,000 merchants already on board; but up until now, we have only been able to request tokens in Visa Checkout for Visa-branded cards.
Today marks a major milestone in the journey to proliferate tokens through the ecosystem. It lays the foundation for a major step forward by enabling our respective solutions, and we anticipate this will lead to safer transactions in the future.